Principles of Macroeconomics / Unit 15 MAC 1416 short lesson, about 20 seconds
Government Can Invest Too
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The idea
Everything so far treats government borrowing as consuming capital. But governments also invest, in the same three things unit four named as sources of growth: physical capital, human capital and technology.
In practice
Borrowing that funds investment is different in kind from borrowing that funds consumption.
Where people slip
This is why the growth question cannot be answered from the deficit figure alone.
Your place on the trail
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